His 'free' prize was going to cost him $237

DAVID BARRON, Copyright 2011 Houston Chronicle |
April 17, 2011

Astros faithful Bob Choate's tale of doughnuts, taxes and baseball seems to have reached a relatively happy ending as the deadline strikes to file income taxes.

On last year's Astros' fan appreciation day, the 56-year-old won 315 coupons from Shipley's Do-Nuts, each worth a cup of coffee and either a free doughnut or a dozen doughnut holes. However, he later received an IRS Form 1099 stating that he owed taxes on his prize, which was valued at $927.61.

Choate protested to the Astros and to Shipley's, claiming that the actual value of his prize fell below the $600 threshold that triggers donors to issue a Form 1099 stating the value of the gift or prize.

After an unsuccessful round of talks with the Astros, Choate said Lawrence Shipley, owner of the Houston-based chain, agreed to write him a check to make up for the difference in taxes created by the $927.61 in income from his prize.

"I have to say that (Shipley) is a gentleman and a scholar - not because I got my way, but he considered my position, wanted to do the right thing for the customer and accepted a suggestion to help his business," Choate said.

Before adding in the 1099 he received from the Astros, Choate said he would have received a tax refund of $302. With the doughnuts and coffee coupons added in as income, he said, his refund dropped to $65, a loss of $237.

Choate said he's made the exchange with the Astros and Shipley a lesson for his kids.

"I told them that if you think something isn't the way it should be, speak up and be professional and reasonable and diplomatic," he said. "And, if you're on the other side of the table, you should listen."

As for the Astros, he said, they gave the family four tickets to the team's home opener and an autographed Jeff Bagwell baseball as a gesture to smooth over any ruffled feelings.

"Given all that has happened, the Astros are back in my good graces," Choate said.

So is Shipley's Do-Nuts. Choate, in fact, said he plans to write a check matching the amount of money he will receive from Lawrence Shipley to donate to Shipley's favorite charity.

And that presumed tax deduction, in turn, could put Choate ahead of the game for next year's filings.